Government Subsidies of R&D in a Product Cycle Framework: US–Japan Simulations

The welfare effects of R&D subsidies are examined using a product cycle model of trade between two developed countries. Simulations are done for steady-state welfare in Japan and the USA for high- and low-skilled labor over different combinations of subsidy rates. Japanese subsidies to R&D usually benefit Americans owing to an increase in product variety. However, because Japanese R&D reduces wages in the US high-tech sector, American high-skilled workers are hurt if Japanese subsidies are too large. Large American subsidies may cause Japanese innovation to cease. However, Japanese steady-state welfare would be maximized in this case.     

CRIME AND LOCAL LABOR MARKET OPPORTUNITIES FOR LOW‐SKILLED WORKERS: EVIDENCE USING JAPANESE PREFECTURAL PANEL DATA

This paper examines the link between crime and labor market opportunities in Japan. To consider this link, we estimate the crime supply function first introduced by Becker using panel data for Japanese prefectures. The main empirical results are as follows. First, we expect that increasing the number of police will reduce crime, regardless of its type (i.e. whether referring to total crime, violent crime or larceny). Second, crime rates are generally lower in prefectures where a low‐skilled individual can find a job more easily. Third, the effects of wages for low‐skilled workers on crime, especially larceny, are significantly negative, whereas average wages in a prefecture do not appear to affect crime. Fourth, the prefectures with lower educational standards are expected to suffer more crime than other prefectures. Finally, prefectures with higher Gini coefficients on schooling years are also expected to suffer more crime than other prefectures.     

员工离职成本与企业在职培训*

假设员工转换工作的“离职成本”是员工的私人信息,对企业而言服从特定分布,企业对员工采取（买方的）三级区别定价。企业的在职培训既提高员工的劳动生产率,又改变员工离职成本的分布,最终影响员工的离职率和“生产率—工资”之差。这两个作用都会影响企业投资于在职培训的激励。已有文献仅关注后一个激励,本文模型则二者兼顾,研究了企业在职培训的决定因素,以及企业培训与员工离职的关系。本文证明,即使没有压缩的工资结构,企业仍有激励提供一般性员工培训。较高的离职率也可以伴随着较高的培训水平,从而同时实现培训效率和劳动力配置效率。本文认为这是欧洲“双元制”培训体系的成功经验,可作为我国经济转型升级的政策参考。     

Why Have Corporate Profits Declined? An International Comparison

The paper compares the trends and determinants of US profits with those of Japan, Germany, and Canada in a model of pricing-to-market in the export and domestic markets. It is found that during the 1970s increasing unit production costs lowered profits in all countries. After 1980, cost factors still affected profits except in the USA where lower real import prices depressed profits. It is shown that a currency appreciation hurts US profits three times more than Japanese profits via the imported inputs channel. This finding may explain why an overvalued currency is sustainable for a longer period in Japan than in the USA.     

ECONOMIC INCENTIVES FOR AN URBAN BIAS IN DEVELOPMENT POLICIES*

This paper presents a labor turnover model in which urban employers have an economic incentive to support an urban bias in development policies because of the indirect effect of rural incomes on urban training expenditures through the rate of labor turnover. A comparative static analysis of the model shows that an income transfer from rural workers to urban workers increases the profits of urban employers, even if urban employers are not directly involved in the transfer. Unlike previous versions of the labor turnover model, worker behavior is explicitly grounded in utility maximization.     

Labor markets and cultural values: Evidence from Japanese and American views about caregiving immigrants

One overlooked reason for the persistence of distinct cultural values across rich democracies, we argue, is a country's labor market structure. Parents seeking to position their children for long‐term success would do well to instill values consistent with requirements of the labor market in the country where their children are likely to work. To the extent that labor markets are fluid, as in the United States, parents should teach their children to be resourceful and creative. In countries like Japan with relatively rigid labor markets, where workers have one chance to land a long‐term contract with a leading company, parents instead should instill the values of hard work and respect for authority. We find evidence consistent with this argument in survey experiments about attitudes in the United States and Japan about the desirability of employing immigrants for care work, and what values the immigrant care workers should hold. We also find evidence of indirect norm creation. American and Japanese respondents prefer immigrants—not just caregiving immigrants—whose values align with their country's type of valued human capital.     

Empirical studies on the relationship between public and private investment and GDP growth

This study performs empirical studies on the interaction between public and private investment and GDP growth for Japan and the USA. Since the data for each country used show features that are quite different from each other, empirical methods of GMM (Generalized Method of Moments) and OLS (Ordinary Least squares) are accordingly applied to Japan and the USA, respectively. The empirical results suggest that both public and private investment make great contributions to Japanese economic growth, while the US private investment seems to play a much more significant role than public investment.     

The Impacts of Japanese and US Outsourcing on Chinese Firms

This paper investigates the impact of manufacturing outsourcing to China from its two biggest trading partners—the USA and Japan, for the period of 1990–2008. Both a fundamental model and an augmented model are established, using export data of intermediate goods and two subcategories, processed goods and parts and components (P&C). We find that output growth is positively correlated with outsourcing, and outsourcing from the USA and Japan exerts lower effects than the average level. Our results show that Chinese outsourcees not only access higher productivity than their domestic non‐outsourcee counterparts, but also generate spillover effects to the non‐outsourcees. Moreover, outsourcees of Japanese multinational corporations (MNCs) gain more technological advantage while outsourcees of US origin act as a more effective external stimulus to increase production of non‐outsourcees in China.     

International demand and liquidity shocks in a SVAR model of the Australian economy

A structural vector autoregressive model of the Australian economy that allows for international shocks from the USA, Japan as well as world commodity prices is specified and estimated for the period 1979–1999. A block exogenous structure linking the three countries is imposed. The international linkages are modelled using a factor structure to circumvent problems from estimating large scale dynamic models. The factors are estimated recursively using a Kalman filter and are found to represent aggregate demand and liquidity shocks for the USA and Japan respectively. The key empirical result is the USA shocks are the dominant source of international shocks on the Australian economy with the Japanese economy having a dampening effect on the USA shocks. The empirical results also show that Australian monetary policy responds to domestic conditions rather than international monetary policy.     

Export strategies in the computer industry: Japan and the USA

Japan's computer manufacturers realize that they need more than a new generation of software (or hardware) for success in world markets. The missing ingredients are primarily multinational busines experience factors, which have worked to the past advantage of US companies. Japan's past export successes — textiles, steel, consumer electronics—have come with products that, unlike computers, could be sold through existing distribution channels. Realizing their disadvantages in selling computer systems worldwide, the Japanese designed the heavily publicized fifth-generation project seeking technology that could serve as a wedge into markets where US-based multinationals had already become firmly entrenched. For this as for other joint government-industry R&D projects in Japan, the indirect effects will be at least as important as the technological outcomes; asking whether the fifth-generation project could have reached particular technical objectives poses the wrong question. In terms of technological capability, Japan could emerge as a formidable rival of the USA in world computer markets. Given the international presence of US companies large and small, this will not be as quick or as easy as in other Japanese export industries: Japan will continue to have far more difficulty exporting computer systems than VCRs or integrated circuits.     

Is Japan really a share economy?

Weitzman claims that Japan is a “living laboratory” for the share economy. This paper examines that proposition and concludes that Japanese bonuses are better interpreted as disguised wage payments than as profit shares. Other institutional features of the Japanese labor market provide more likely explanations of that economy's performance.     

Sources of Productivity Growth Dynamics: Is Japan Suffering From Baumol's Growth Disease?

This study examines the sources of labor productivity growth dynamics in Japan (1970–2010) and investigates the extent to which Japanese economic performance has been affected by Baumol's growth disease (BGD). We find that BGD silently undermines Japanese economic growth. However, the magnitude is miniscule, and consequently the aggregate labor productivity growth rate has not been decreasing monotonically. We also explore how BGD is arising and why it is small in the Japanese economy. BGD is weak because (1) the positive Baumol growth effect is also working in certain services sectors and (2) BGD is not a durable phenomenon: even if a sector begins to suffer from BGD, it is likely to recover quickly.     

Export strategies in the computer industry: Japan and the USA

Japan's computer manufacturers realize that they need more than a new generation of software (or hardware) for success in world markets. The missing ingredients are primarily multinational busines experience factors, which have worked to the past advantage of US companies. Japan's past export successes — textiles, steel, consumer electronics—have come with products that, unlike computers, could be sold through existing distribution channels. Realizing their disadvantages in selling computer systems worldwide, the Japanese designed the heavily publicized fifth-generation project seeking technology that could serve as a wedge into markets where US-based multinationals had already become firmly entrenched. For this as for other joint government-industry R&D projects in Japan, the indirect effects will be at least as important as the technological outcomes; asking whether the fifth-generation project could have reached particular technical objectives poses the wrong question. In terms of technological capability, Japan could emerge as a formidable rival of the USA in world computer markets. Given the international presence of US companies large and small, this will not be as quick or as easy as in other Japanese export industries: Japan will continue to have far more difficulty exporting computer systems than VCRs or integrated circuits.     

JOB FLOWS AND UNEMPLOYMENT IN AN EQUILIBRIUM UNEMPLOYMENT MODEL WITH FIRM‐SPECIFIC SKILL TRAINING*

We introduce productivity enhancing firm‐specific skill training into the labour search model in which the firm‐specific skill training intensity and the job destruction rate are endogenously determined. It is shown that the higher the intensity of such training, the lower the rates of unemployment, job creation and job destruction. The paper's model provides a theoretical framework to understand the often mentioned peculiarity of the Japanese labour market; prevalently low rates of unemployment, job creation and job destruction in Japan are due to its training system which promotes workers to acquire firm‐specific skills.     

Why Has the Fraction of Nonstandard Workers Increased? A Case Study of Japan

This paper explains the secular increase of nonstandard workers in Japan, whose share of employment increased from 17 to 34% between 1986 and 2008. Changes in labor force and industrial compositions account for one quarter of the increase of nonstandard workers. Product‐demand fluctuation and the introduction of information and communication technologies increased firms' usage of nonstandard workers, but its quantitative effects are limited. The increase of nonstandard workers was concentrated among new entrants to the labor market, male workers of younger cohorts, and female workers of all cohorts, suggesting that the declining importance of the long‐term employment relationship is a major cause for the increase of nonstandard workers.     

US Hegemony and the Origins of Japanese Nuclear Power: The Politics of Consent

This paper deploys the Gramscian concepts of hegemony and consent in order to explore the process whereby nuclear power was brought to Japan. The core argument is that nuclear power was brought to Japan as a consequence of US hegemony. Rather than a simple manifestation of one state exerting material ‘power over' another, bringing nuclear power to Japan involved a series of compromises worked out within and between state and civil society in both Japan and the USA. Ideologies of nationalism, imperialism and modernity underpinned the process, coalescing in post-war debates about the future trajectory of Japanese society, Japan's Cold War alliance with the USA and the role of nuclear power in both. Consent to nuclear power was secured through the generation of a psychological state in the public mind combining the fear of nuclear attack and the hope of unlimited consumption in a nuclear-fuelled post-modern world.     

The Impact of Income Taxation on the Labor Supply of Part-time and Full-time Workers

This paper estimates the effect of income taxation on the labor supply of part-time and full-time workers in the United States. Using a model that incorporates the endogeneity of the net wage rate and the virtual income, and correcting for self-selection into part-time and full-time jobs, the results indicate that part-time workers are relatively more responsive to changes in income tax than full-time workers. Estimated wage elasticities are relatively larger for part-time than for full-time workers.The simulation results indicate that income tax has a disincentive effect on both part-time and full-time workers, with part-time and full-time workers reducing their labor supply by 0.87 and 0.58 hours, respectively, if a 5% tax is imposed. However, the percentage reduction in hours of work is very small, and a tax policy may have little effect on the labor supply of workers.The results seem to suggest that female and black part-time workers are more likely to drop out of the labor force at higher levels of income tax. It also tests the hypothesis that the labor supply behavior of parttime and full-time workers differs.The test results indicate that the determinants of the labor supply of part-time workers are different from those of full-time workers. It is noted that there is a significant difference between the labor supply of male part-time and female parttime workers, as well as between the black part-time and white part-time workers. In order to reduce voluntary unemployment in market activities among married females and blacks, the government can encourage part-time work by sponsoring legislation or instituting a scheme that will allow part-time workers to pay relatively less in payroll taxes.     

A MODEL OF GENERAL TRAINING, BANKING, AND LABOR TURNOVER

Conventionally, models of general training assume perfect capital markets; as a result, workers smooth their consumption stream through borrowing. In these models general training has no effect on labor turnover. I develop a model of general training where workers have diminishing marginal utility from consumption, capital markets are imperfect, and a firm cannot monitor the match quality with another firm of a worker who quits. It is shown that in the absence of a surplus effect from training, raising the level of general training steepens the worker's wage profile for reasons associated with consumption smoothing and labor turnover. However, with the surplus effect, results may be ambiguous.     

A Unit Root Test With Multiple Trend Breaks: A Theory and an Application to US and Japanese Macroeconomic Time-Series

This study develops a unit root test that allows for an alternative hypothesis with multiple trend breaks of unknown dates, and proves that tests with fewer than the true number of breaks fail, incorrectly, to reject the null asymptotically. The asymptotic distributions of appropriate t -statistics under the unit root null are determined. In empirical applications, this test rejects the null for the Nelson–Plosser velocity of the USA, the postwar quarterly real output series of the USA and Japan, and Japanese real consumption, but not for real consumption of the USA. The finite-sample properties are examined with Monte Carlo experiments.
JEL Classification Numbers: C32, C12, E32.     

A Schumpeterian model of equilibrium unemployment and labor turnover

This paper constructs a general equilibrium model of equilibrium unemployment by combining an endogenous growth model with a variant of equilibrium search theory. The analysis offers two explanations for the causes of widening wage gap between skilled and less-skilled labor, and rising unemployment rate among the less skilled: technological change in the form of an increase in the size of innovations or skilled labor saving technological change in R&D activity. In addition, the model identifies two distinct effects of faster technological progress on the aggregate unemployment rate. First, it increases the rate of labor turnover and therefore increases the aggregate unemployment rate – the creative destruction effect. Second, it creates R&D jobs, which offer workers complete job security, and consequently reduces the aggregate unemployment rate – the resource reallocation effect.